NEW YORK CITY -- A new investment fund has begun raising money for the math-based currency that tech enthusiasts say could revolutionize online transactions. SecondMarket's Bitcoin Investment Trust, or BIT, represents the latest effort to bring the virtual currency into the mainstream. It might also fuel the debate around the legitimacy and legality of a form of money that exists outside the conventional banking system, and has already attracted scrutiny for being used in illicit transactions. | SEE STORY
BIT is a private, open-ended trust invested exclusively in bitcoin. The sponsor of the trust is Alternative Currency Asset Management LLC, a wholly owned subsidiary of SecondMarket Holdings Inc. The fund was created for accredited investors looking for exposure to bitcoin through an investment vehicle instead of a direct investment. According to SecondMarket, BIT solves the challenges of buying, storing and safekeeping bitcoins.
Slowly, bitcoin is becoming a form of payment by a growing number of businesses. Utica, NY's Upstate Networks recently demonstrated how a vending machine can accept the virtual currency. | SEE STORY
For investors, an uncertain regulatory environment for bitcoins is a big risk. Regulators are examining whether the currency is dodging financial oversight, allowing its use by money launderers, drug traffickers and tax evaders. Making headlines this week was a story about an online marketplace allegedly selling illegal drugs to tech savvy Long Island and New York City residents. To make sure money exchanges could not be traced back to customers, according to sources, the website used bitcoins for transactions. | SEE STORY